This IS the Avid L2: [Avid-L2] Avid Form 8-K August 5 2019

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 5, 2019

AVID TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in Its Charter)



Delaware	1-36254	04-2977748
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

75 Network Drive, Burlington, Massachusetts 01803

(Address of Principal Executive Offices) (Zip Code)

(978) 640-6789

(Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

⎕ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⎕ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⎕ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⎕ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ⎕

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ⎕

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $.01 par value	AVID	Nasdaq Global Select Market

Item 2.02. Results of Operations and Financial Condition.

On August 5, 2019, Avid Technology, Inc. (the "Company") issued a press release announcing its financial results for the fiscal quarter ended June 30, 2019 (the "Press Release"). The full text of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure.

The information contained in Item 2.02 is incorporated by reference herein.

Non-GAAP and Operational Measures. The attached Press Release includes financial measures that are not based on generally accepted accounting principles, or GAAP. These non-GAAP financial measures, which are not based on a comprehensive set of accounting rules or principles, include the following: non-GAAP Gross Profit, non-GAAP Gross Margin, non-GAAP Operating Expenses, non-GAAP Operating Income (Loss), Adjusted EBITDA, Adjusted EBITDA Margin, non-GAAP Interest and Other Expense, non-GAAP Income Tax Provision, non-GAAP Net Income (Loss), non-GAAP Net Income (Loss) Per Share, and Free Cash Flow.


•	Non-GAAP Gross Profit is defined as GAAP gross profit, excluding amortization of intangible assets and stock-based compensation expense.


•	Non-GAAP Gross Margin is defined as GAAP gross margin, excluding amortization of intangible assets and stock-based compensation expense.


•	Non-GAAP Operating Expenses are defined as GAAP operating expense excluding restructuring costs, stock-based compensation, amortization of intangible assets as well as other unusual items such as costs related to the restatement, M&A related activity, and efficiency program.


•	Non-GAAP Operating Income (Loss) is defined as GAAP operating income (loss) excluding restructuring costs, stock-based compensation, amortization of intangible assets as well as other unusual items such as costs related to the restatement, M&A related activity, and efficiency program.


•	Adjusted EBITDA is defined as non-GAAP operating income (loss) excluding depreciation expense.


•	Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by GAAP Net Revenues.


•	Non-GAAP Interest and Other Expense is defined as GAAP interest and other expense excluding one-time financing fees and loss on extinguishment of debt.


•	Non-GAAP Income Tax Provision is defined as the provision for income taxes on non-GAAP profit (loss) before income taxes, which is non-GAAP Operating Income (Loss) excluding Non-GAAP Interest and Other Expense.


•	Non-GAAP Net Income (Loss) is defined as Non-GAAP Operating Income (Loss) less Non-GAAP Interest and Other Expense, and Non-GAAP Income Tax Provision.


•	Non-GAAP Net Income (Loss) Per Share is defined as non-GAAP Net Income (Loss) divided by weighted-average common shares outstanding.


•	Free Cash Flow is defined as GAAP operating cash flow less capital expenditures.

Reconciliations of these non-GAAP financial measures to their most comparable GAAP measures are contained in the tables accompanying the Press Release. The Press Release furnished herewith also includes forward-looking non-GAAP financial measures, including Adjusted EBITDA, Free Cash Flow and Non-GAAP Net Income (Loss) Per Share. Reconciliations of these forward-looking non-GAAP financial measures are not included in the Press Release furnished herewith due to the high variability and difficulty in making accurate forecasts and projections of some of the excluded information, together with some of the excluded information not being ascertainable or accessible at this time. As a result, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measure without unreasonable efforts.

These non-GAAP financial measures reflect how Avid manages its businesses internally. Avid's non-GAAP measures may vary from how other companies present non-GAAP measures. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by GAAP. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP.

The Press Release furnished herewith also includes the operational metrics of Cloud-enabled software subscriptions, Recurring Revenue, Annual Contract Value and Revenue Backlog. Definitions of these operational metrics are included in the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com.

•

Cloud-enabled software subscriptions as of the end of a quarter represent the number of paid subscription licenses under an active contract as of that date, excluding any licenses that may be receiving service under an active contract but that are not paid for at that time by the customer, whether due to a promotion, cancellation or otherwise. For comparison purposes, subscription numbers for previous quarters have been adjusted from previously published numbers to (i) include multi-year and multi-seat licenses, and (ii) exclude certain terminated subscription licenses.


•	Recurring Revenue is defined as the sum, without duplication, of subscription revenue, maintenance revenue and revenue under our long-term contractual agreements.


•	LTM Recurring Revenue % is Recurring Revenue divided by Total Net Revenue for the most recent four quarters.

•

Annual Contract Value is defined, as of a given date, as the sum of the following three components: (i) the annual value of all long-term contractual agreements in effect on such date, calculated by dividing the total value of each contract (excluding expected maintenance revenue included in (ii) below and expected subscription revenue included in (iii) below) divided by the total number of years of such contract, (ii) maintenance revenue for the quarter ended on such date, multiplied by four, and (iii) subscription revenue for the quarter ended on such date, multiplied by four.


•	Revenue Backlog consists of firm orders received and includes both (i) orders where the customer has been invoiced in advance of our performance obligations being fulfilled and (ii) orders for future product deliveries or services that have not yet been invoiced by us.

Limitation on Incorporation by Reference. The information furnished in Items 2.02 and 7.01, including the Press Release furnished herewith as Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Cautionary Note Regarding Forward-Looking Statements. This Form 8-K, and the Press Release furnished herewith as Exhibit 99.1 contain forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary notes in the Press Release regarding these forward-looking statements.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.



Exhibit Number	Description
99.1	Press Release announcing financial results, dated August 5, 2019

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	AVID TECHNOLOGY, INC.
	(Registrant)


Date: August 5, 2019	By:	/s/ Kenneth Gayron
	Name:	Kenneth Gayron
	Title:	Executive Vice President and CFO

Exhibit 99.1

Avid Technology Announces Q2 2019 Results

Continued improvement in key financial metrics and Free Cash Flow

New Non-GAAP Net Income Per Share guidance introduced for 2019, given positive trajectory of the business

BURLINGTON, Mass., August 5, 2019 -- Avid® (NASDAQ: AVID), a leading technology provider that powers the media and entertainment industry, today announced its second quarter 2019 financial results, provided guidance for the third quarter of 2019, reaffirmed full-year 2019 guidance and introduced new Non-GAAP Net Income Per Share guidance for full-year 2019.

Second Quarter 2019 Financial and Business Highlights


•	Revenue was $98.7 million, up slightly year-over-year from $98.6 million.


•	Gross margin was 57.4%, up 30 basis points year-over-year. Non-GAAP Gross Margin was 59.4%, up 20 basis points year-over-year.


•	Operating expenses were $54.1 million, a decrease of 7% year-over-year. Non-GAAP Operating Expenses were $51.8 million, a decrease of 8% year-over-year.


•	Operating income was $2.6 million, up from operating loss of ($2.1) million in Q2 2018. Non-GAAP Operating Income was $6.9 million, an increase of 188% year-over-year.


•	Adjusted EBITDA was $9.4 million, an increase of 78% year-over-year. Adjusted EBITDA Margin was 9.5%, up 410 basis points year-over-year.


•	GAAP net loss per common share was ($0.25), compared to net loss per common share of ($0.20) in Q2 2018. Non-GAAP Net Income per Share was $0.02, up from Non-GAAP Net Loss per Share of ($0.10) in Q2 2018.


•	Net cash used in operating activities was ($2.7) million, compared to Net cash used in operating activities of ($5.9) million in Q2 2018.


•	Free Cash Flow was ($4.5) million, an improvement of $4.2 million compared to Free Cash Flow of ($8.7) million in Q2 2018.


•	Software revenue from subscriptions increased 17% year-over-year with approximately 147,000 cloud-enabled software subscriptions at the end of Q2 2019.


•	Revenue through the Company's e-commerce activities was up 19% year-over-year.


•	Recurring Revenue was 58% of the Company's revenue in the twelve months ending June 30, 2019, up from 51% in the twelve months ending June 30, 2018.


•	Annual Contract Value was $246 million at the end of Q2 2019, up slightly from $245 million at the end of Q2 2018.

"Despite some slight revenue headwinds in the second quarter related to our supply chain transition, I am pleased with our overall performance in the first half of 2019 as our results are in line with our plans. We are better positioned emerging from the first half than we have been in many years," said Jeff Rosica, CEO and President of Avid. "We're pleased that our strategic plan is delivering as expected, and that we're on a good trajectory for the second half, aided by the delivery of significant new products to market in the second quarter, including new versions of our flagship creative tools, MediaCentral platform, and cloud storage."

"While we continue to see year over year improvements in gross margin, Adjusted EBITDA, and Free Cash Flow, we faced certain headwinds during Q2 related to our supply chain transition that brought our Q2 results below expectations," commented Ken Gayron, Executive Vice President and Chief Financial Officer of Avid. Mr. Gayron added, "That said, we continue to see the benefits from our Smart Savings initiatives which have enhanced our profitability and cash flow. We are well positioned as we enter the second half of 2019 to see continued year over year improvement in our key financial metrics." Mr. Gayron further added, "We are

introducing Non-GAAP Net Income Per Share guidance for full-year 2019 to provide more information to investors to evaluate the progress we are making in our business model."

Explanations regarding our use of non-GAAP financial measures and operational metrics and related definitions, and reconciliations of our GAAP and non-GAAP measures, are provided in the sections below entitled "Non-GAAP Financial Measures and Operational Metrics" and "Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures".

Third Quarter and Full-Year 2019 Guidance

For the third quarter of 2019, Avid is providing Revenue and Adjusted EBITDA guidance. Avid is also reaffirming its guidance for Revenue, Adjusted EBITDA and Free Cash Flow for full-year 2019 and introducing Non-GAAP Net Income Per Share guidance for full-year 2019.



($ millions, except per share amounts)	Q3 2019	Full-Year 2019
Revenue	$101.0 - $109.0	$420 - $430
Adjusted EBITDA	$13.5 - $18.5	$60 - $65
Free Cash Flow		$12 - $17
Non-GAAP Net Income Per Share		$0.60 - $0.72

All guidance presented by the Company is inherently uncertain and subject to numerous risks and uncertainties. Avid's actual future results of operations could differ materially from those shown in the table above. For a discussion of some of the key assumptions underlying the guidance, as well as the key risks and uncertainties associated with these forward-looking statements, please see "Forward-Looking Statements" below as well as the Avid Technology Q2 2019 Business Update presentation posted on Avid's Investor Relations website http://ir.avid.com.

Conference Call

Avid will host a conference call to discuss its financial results for the second quarter on Monday, August 5, 2019 at 5:00 p.m. ET. The call will be open to the public and can be accessed by dialing 323-794-2551 and referencing confirmation code 2594566. You may also access the presentation slides and listen to the call on the Avid Investor Relations website. To listen via the website, go to the events tab at ir.avid.com for complete details prior to the start of the conference call. A replay of the call will also be available for a limited time on the Avid Investor Relations website shortly after the completion of the call.

Non-GAAP Financial Measures and Operational Metrics

Avid includes non-GAAP financial measures in this press release, including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Expenses, Non-GAAP Operating Income, Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per Share. The Company also includes the operational metrics of Bookings, Cloud-enabled software subscriptions, Recurring Revenue and Annual Contract Value in this release. Avid believes the non-GAAP financial measures and operational metrics provided in this release provide helpful information to investors with respect to evaluating the Company's performance. Unless noted, all financial and operating information is reported based on actual exchange rates. Definitions of the non-GAAP financial measures and operational metrics are included in our Form 8-K filed today. Reconciliations of the non-GAAP financial measures in this release to the Company's comparable GAAP financial measures for the periods presented are set forth below and are also included in the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com, which also includes definitions of all operational metrics.

The earnings release also includes forward-looking non-GAAP financial measures, including Adjusted EBITDA and Free Cash Flow. Reconciliations of these forward-looking non-GAAP financial measures are not included in the earnings release due to the high variability and difficulty in making accurate forecasts and projections of some of the excluded information, together with some of the excluded information not being ascertainable or accessible at this time. As a result, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measure without unreasonable efforts.

Forward-Looking Statements

Certain information provided in this press release, including the tables attached hereto, include forward-looking statements that involve risks and uncertainties, including projections and statements about our anticipated plans, objectives, expectations and intentions. Among other things, this press release includes estimated results of operations for the three months ending September 30, 2019 and the year ending December 31, 2019, which estimates are based on a variety of assumptions about key factors and metrics that will determine our future results of operations, including, for example, anticipated market uptake of new products and market-based cost inflation. Other forward-looking statements include, without limitation, statements based upon or otherwise incorporating judgments or estimates relating to future performance such as future operating results and expenses; earnings; backlog; revenue backlog conversion rate; product mix and free cash flow; Recurring Revenue and Annual Contract Value; our future strategy and business plans; our product plans, including products under development, such as cloud and subscription based offerings; our ability to raise capital and our liquidity. The projected future results of operations, and the other forward-looking statements in this release, are based on current expectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including but not limited to the effect on our sales, operations and financial performance resulting from: our liquidity; our ability to execute our strategic plan, and meet customer needs; our ability to retain and hire key personnel; our ability to produce innovative products in response to changing market demand, particularly in the media industry; our ability to successfully accomplish our product development plans; competitive factors; history of losses; fluctuations in our revenue based on, among other things, our performance and risks in particular geographies or markets; our higher indebtedness and ability to service it and meet the obligations thereunder; restrictions in our credit facilities; our move to a subscription model and related effect on our revenues and ability to predict future revenues; fluctuations in subscription and maintenance renewal rates; elongated sales cycles; fluctuations in foreign currency exchange rates; seasonal factors; adverse changes in economic conditions; variances in our revenue backlog and the realization thereof; and the possibility of legal proceedings adverse to our company. Moreover, the business may be adversely affected by future legislative, regulatory or other changes, including tax law changes, as well as other economic, business and/or competitive factors. The risks included above are not exhaustive. Other factors that could adversely affect our business and prospects are set forth in our public filings with the SEC. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

About Avid

Avid delivers the most open and efficient media platform, connecting content creation with collaboration, asset protection, distribution, and consumption. Avid's preeminent customer community uses Avid's comprehensive tools and workflow solutions to create, distribute and monetize the most watched, loved and listened to media in the world-from prestigious and award-winning feature films to popular television shows, news programs and televised sporting events, and celebrated music recordings and live concerts. With the most flexible deployment and pricing options, Avid's industry-leading solutions include Media Composer®, Pro Tools®, Avid NEXIS®, MediaCentral®, iNEWS®, AirSpeed®, Sibelius®, Avid VENUE™, Avid FastServe®™, Maestro™, and

PlayMaker™. For more information about Avid solutions and services, visit www.avid.com, connect with Avid on Facebook, Instagram, Twitter, YouTube, LinkedIn, or subscribe to Avid Blogs.

© 2019 Avid Technology, Inc. All rights reserved. Avid, the Avid logo, Avid NEXIS, Avid FastServe, AirSpeed, iNews, Maestro, MediaCentral, Media Composer, NewsCutter, PlayMaker, Pro Tools, Avid VENUE, and Sibelius are trademarks or registered trademarks of Avid Technology, Inc. or its subsidiaries in the United States and/or other countries. All other trademarks are the property of their respective owners. Product features, specifications, system requirements and availability are subject to change without notice.

Contacts



Investor Contact:		PR Contact:
Whit Rappole		Jim Sheehan
Avid		Avid
ir@avid.com		jim.sheehan@avid.com
(978) 275-2032		(978) 640-3152

AVID TECHNOLOGY, INC.

Condensed Consolidated Statements of Operations

(unaudited - in thousands except per share data)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
Net revenues:
Products	$	50,326		$	46,379		$	104,722		$	92,789
Services	48,375			52,236			97,298			103,763
Total net revenues	98,701			98,615			202,020			196,552

Cost of revenues:
Products	28,058			26,347			55,658			52,642
Services	12,195			13,986			24,682			27,971
Amortization of intangible assets	1,788			1,950			3,738			3,900
Total cost of revenues	42,041			42,283			84,078			84,513
Gross profit	56,660			56,332			117,942			112,039

Operating expenses:
Research and development	15,180			15,985			31,465			31,670
Marketing and selling	26,129			27,759			51,007			53,891
General and administrative	12,721			14,041			26,509			27,996
Amortization of intangible assets	332			363			695			726
Restructuring costs, net	(269		)	268			289			3,175
Total operating expenses	54,093			58,416			109,965			117,458

Operating income (loss)	2,567			(2,084		)	7,977			(5,419		)

Interest and other expense, net	(13,290		)	(6,278		)	(18,475		)	(11,637		)
Loss before income taxes	(10,723		)	(8,362		)	(10,498		)	(17,056		)
Provision for income taxes	—			144			438			399
Net loss	$	(10,723	)	$	(8,506	)	$	(10,936	)	$	(17,455	)

Net loss per common share – basic and diluted	$	(0.25	)	$	(0.20	)	$	(0.26	)	$	(0.42	)

Weighted-average common shares outstanding – basic and diluted	42,560			41,587			42,305			41,496

AVID TECHNOLOGY, INC.

Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures

(unaudited - in thousands)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
GAAP revenue
Total net revenues	$	98,701		$	98,615		$	202,020		$	196,552

Non-GAAP Gross Profit
GAAP gross profit	56,660			56,332			117,942			112,039
Amortization of intangible assets	1,788			1,950			3,738			3,900
Stock-based compensation	167			74			235			127
Non-GAAP Gross Profit	$	58,615		$	58,356		121,915			116,066
Non-GAAP Gross Margin	59.4		%	59.2		%	60.3		%	59.1		%

Non-GAAP Operating Expenses
GAAP operating expenses	54,093			58,416			109,965			117,458
Less Amortization of intangible assets	(332		)	(363		)	(695		)	(726		)
Less Stock-based compensation	(1,838		)	(1,478		)	(3,507		)	(2,128		)
Less Restructuring costs, net	269			(268		)	(289		)	(3,175		)
Less Restatement costs	(6		)	(365		)	2			(592		)
Less Acquisition, integration and other costs	(274		)	38			(425		)	(44		)
Less Efficiency program costs	(155		)	(3		)	(158		)	(78		)
Non-GAAP Operating Expenses	$	51,757		$	55,977		104,893			110,715

Non-GAAP Operating Income
GAAP operating income (loss)	2,567			(2,084		)	7,977			(5,419		)
Amortization of intangible assets	2,120			2,313			4,433			4,626
Stock-based compensation	2,005			1,552			3,742			2,255
Restructuring costs, net	(269		)	268			289			3,175
Restatement costs	6			365			(2		)	592
Acquisition, integration and other costs	274			(38		)	425			44
Efficiency program costs	155			3			158			78
Non-GAAP Operating Income	$	6,858		$	2,379		17,022			5,351



Adjusted EBITDA
Non-GAAP Operating Income (from above)	$	6,858		$	2,379		17,022			5,351
Depreciation	2,564			2,913			4,992			6,274
Adjusted EBITDA	$	9,422		$	5,292		22,014			11,625
Adjusted EBITDA Margin	9.5		%	5.4		%	10.9		%	5.9		%

Non-GAAP Net Income (Loss)
Non-GAAP Operating Income (from above)	6,858			2,379			17,022			5,351
Less: Non-GAAP interest and other expense	(5,994		)	(6,278		)	(11,179		)	(11,637		)
Less: Non-GAAP income tax provision	21			(185		)	(455		)	(479		)
Non-GAAP Net Income (Loss)	$	885		$	(4,084	)	$	5,388		$	(6,765	)
Weighted-average common share outstanding - basic	42,560			41,587			42,305			41,496
Weighted-average common share outstanding - diluted	43,532			41,587			43,130			41,496
Non-GAAP Net Income (Loss) Per Share - basic and diluted	$	0.02		$	(0.10	)	$	0.13		$	(0.16	)

Free Cash Flow
GAAP net cash (used in) provided by operating activities	(2,713		)	(5,871		)	3,663			(501		)
Capital expenditures	(1,809		)	(2,808		)	(3,576		)	(4,888		)
Free Cash Flow	$	(4,522	)	$	(8,679	)	87			(5,389		)
Free Cash Flow conversion of Adjusted EBITDA	(48.0		)%	(164.0		)%	0.4		%	(46.4		)%

These non-GAAP measures reflect how Avid manages its businesses internally. Avid's non-GAAP measures may vary from how other companies present non-GAAP measures. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by generally accepted accounting principles, or GAAP. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP.

AVID TECHNOLOGY, INC.

Condensed Consolidated Balance Sheets

(unaudited - in thousands)



	June 30,			December 31,
	2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	50,955		$	56,103
Restricted cash	9,020			8,500
Accounts receivable, net of allowances of $788 and $1,339 at June 30, 2019 and December 31, 2018, respectively.	58,634			67,754
Inventories	34,105			32,956
Prepaid expenses	10,080			8,853
Contract assets	18,478			16,513
Other current assets	5,466			5,917
Total current assets	186,738			196,596
Property and equipment, net	20,132			21,582
Intangible assets, net	—			4,432
Goodwill	32,643			32,643
Right of use assets	33,324			—
Long-term deferred tax assets, net	1,122			1,158
Other long-term assets	8,142			9,432
Total assets	$	282,101		$	265,843

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	39,083		$	39,239
Accrued compensation and benefits	17,054			21,967
Accrued expenses and other current liabilities	40,899			37,547
Income taxes payable	1,791			1,853
Short-term debt	28,871			1,405
Deferred revenue	79,214			85,662
Total current liabilities	206,912			187,673
Long-term debt	200,227			220,590
Long-term deferred revenue	14,302			13,939
Long-term lease liabilities	31,216			—
Other long-term liabilities	5,267			10,302
Total liabilities	457,924			432,504

Stockholders' deficit:
Common stock	427			423
Additional paid-in capital	1,025,301			1,028,924
Accumulated deficit	(1,197,946		)	(1,187,010		)
Treasury stock at cost	—			(5,231		)
Accumulated other comprehensive loss	(3,605		)	(3,767		)
Total stockholders' deficit	(175,823		)	(166,661		)
Total liabilities and stockholders' deficit	$	282,101		$	265,843

AVID TECHNOLOGY, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited - in thousands)



	Six Months Ended
	June 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(10,936	)	$	(17,455	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	9,424			10,899
Recovery from doubtful accounts	(48		)	(43		)
Stock-based compensation expense	3,743			2,255
Non-cash provision for restructuring	—			934
Non-cash interest expense	5,966			6,149
Loss on extinguishment of debt	2,878			—
Unrealized foreign currency transaction losses (gains)	105			(921		)
Provision for deferred taxes	43			5
Changes in operating assets and liabilities:
Accounts receivable	9,168			13,525
Inventories	(1,149		)	653
Prepaid expenses and other assets	(1,095		)	2,454
Accounts payable	(167		)	3,426
Accrued expenses, compensation and benefits and other liabilities	(6,106		)	(12,275		)
Income taxes payable	(6		)	(37		)
Deferred revenue and contract assets	(8,157		)	(10,070		)
Net cash provided by (used in) operating activities	3,663			(501		)

Cash flows from investing activities:
Purchases of property and equipment	(3,576		)	(4,888		)
Increase in other long-term assets	—			(17		)
Net cash used in investing activities	(3,576		)	(4,905		)

Cash flows from financing activities:
Proceeds from long-term debt	79,289			22,688
Repayment of debt	(714		)	(2,998		)
Payments for repurchase of outstanding notes	(76,269		)	(1,725		)
Proceeds from the issuance of common stock under employee stock plans	309			256
Common stock repurchases for tax withholdings for net settlement of equity awards	(1,895		)	(649		)
Partial unwind capped call cash receipt	27			2
Payments for credit facility issuance costs	(5,979		)	—
Net cash (used in) provided by financing activities	(5,232		)	17,574

Effect of exchange rate changes on cash, cash equivalents and restricted cash	(3		)	(401		)
Net (decrease) increase in cash, cash equivalents and restricted cash	(5,148		)	11,767
Cash, cash equivalents and restricted cash at beginning of period	68,094			60,433
Cash, cash equivalents and restricted cash at end of period	$	62,946		$	72,200
Supplemental information:
Cash and cash equivalents	$	50,955		$	60,209
Restricted cash	9,020			8,500
Restricted cash included in other long-term assets	2,971			3,491
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	62,946		$	72,200

AVID TECHNOLOGY, INC.

Supplemental Revenue Information

(unaudited - in millions)



Backlog Disclosure for Quarter Ended June 30, 2019

	June 30,		March 31,		June 30,
	2019		2019		2018
Revenue Backlog*

Deferred Revenue		$93.5		$101.3		$97.7
Other Backlog	351.3		358.4		350.5
Total Revenue Backlog		$444.8		$459.7		$448.2


The expected timing of recognition of revenue backlog as of June 30, 2019 is as follows:

	2019		2020		2021		Thereafter		Total

Deferred Revenue		$54.9		$25.6		$8.4		$4.6		$93.5
Other Backlog	87.3		75.8		61.6		126.6		351.3
Total Revenue Backlog		$142.2		$101.4		$70		$131.2		$444.8

*A definition of Revenue Backlog is included in our Form 8-K filed today and the supplemental financial and operational data sheet available on our investor relations webpage at ir.avid.com.